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How do workers adjust when firms adopt new technologies?

Author

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  • Genz, Sabrina
  • Gregory, Terry
  • Janser, Markus
  • Lehmer, Florian
  • Matthes, Britta

Abstract

We investigate how workers adjust to firms' investments into new digital technologies, including artificial intelligence, augmented reality, or 3D printing. For this, we collected novel data that links survey information on firms' technology adoption to administrative social security data. We then compare individual outcomes between workers employed at technology adopters relative to non-adopters. Depending on the type of technology, we find evidence for improved employment stability, higher wage growth, and increased cumulative earnings in response to digital technology adoption. These beneficial adjustments seem to be driven by technologies used by service providers rather than manufacturers. However, the adjustments do not occur equally across worker groups: IT-related expert jobs with non-routine analytic tasks benefit most from technological upgrading, coinciding with highly complex job requirements, but not necessarily with more academic skills.

Suggested Citation

  • Genz, Sabrina & Gregory, Terry & Janser, Markus & Lehmer, Florian & Matthes, Britta, 2021. "How do workers adjust when firms adopt new technologies?," ZEW Discussion Papers 21-073, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:21073
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    Cited by:

    1. Genz, Sabrina & Schnabel, Claus, 2023. "Digitalization is not gender-neutral," Economics Letters, Elsevier, vol. 230(C).
    2. Caselli, Mauro & Fracasso, Andrea & Marcolin, Arianna & Scicchitano, Sergio, 2021. "The reassuring effect of firms' technological innovations on workers' job insecurity," GLO Discussion Paper Series 938, Global Labor Organization (GLO).
    3. Ed Felten & Manav Raj & Robert Seamans, 2023. "How will Language Modelers like ChatGPT Affect Occupations and Industries?," Papers 2303.01157, arXiv.org, revised Mar 2023.
    4. Arntz, Melanie & Genz, Sabrina & Gregory, Terry & Lehmer, Florian & Zierahn-Weilage, Ulrich, 2024. "De-Routinization in the Fourth Industrial Revolution - Firm-Level Evidence," IZA Discussion Papers 16740, Institute of Labor Economics (IZA).
    5. Zarifhonarvar, Ali, 2023. "Economics of ChatGPT: A Labor Market View on the Occupational Impact of Artificial Intelligence," EconStor Preprints 268826, ZBW - Leibniz Information Centre for Economics.
    6. Gathmann, Christina & Kagerl, Christian & Pohlan, Laura & Roth, Duncan H.W., 2023. "The Pandemic Push: Digital Technologies and Workforce Adjustments," IZA Discussion Papers 16062, Institute of Labor Economics (IZA).
    7. Matheus Eduardo Leusin, 2022. "The Development of Al in Multinational Enterprises - Effects upon Technological Trajectories and Innovation Performance," Bremen Papers on Economics & Innovation 2201, University of Bremen, Faculty of Business Studies and Economics.
    8. Toon Van Overbeke, 2023. "Conflict or cooperation? Exploring the relationship between cooperative institutions and robotisation," British Journal of Industrial Relations, London School of Economics, vol. 61(3), pages 550-573, September.
    9. Daron Acemoglu & Gary W. Anderson & David N. Beede & Catherine Buffington & Eric E. Childress & Emin Dinlersoz & Lucia S. Foster & Nathan Goldschlag & John C. Haltiwanger & Zachary Kroff & Pascual Res, 2022. "Automation and the Workforce: A Firm-Level View from the 2019 Annual Business Survey," NBER Chapters, in: Technology, Productivity, and Economic Growth, National Bureau of Economic Research, Inc.
    10. Arntz, Melanie & Genz, Sabrina & Gregory, Terry & Lehmer, Florian & Zierahn-Weilage, Ulrich, 2024. "De-routinization in the fourth industrial revolution: Firm-level evidence," ZEW Discussion Papers 24-005, ZEW - Leibniz Centre for European Economic Research.
    11. Arntz, Melanie & Blesse, Sebastian & Doerrenberg, Philipp, 2022. "The end of work is near, isn't it? Survey evidence on automation angst," ZEW Discussion Papers 22-036, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    technological change; artificial intelligence; employment stability; wages;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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